By Elia Lopez
Dec 21, 2024, 11:57 AM EST
Given the changes of consumer habits who prefer electronic commerce and economic situations that are not favorable in some areas, which have impacted the sales of some stores, Macy’s plans to close some branches, as announced at the beginning of the year, but apparently will accelerate the closure of some stores.
And Macy’s reported that will close around 65 stores after the Christmas seasona number that exceeds the retail company’s initial expectations by 15.
Tony Spring, CEO of Macy’s, said that at the beginning of the year, the company had anticipated the closure of between 50 and 55 branches by the end of 2024, but they decided to accelerate the process due to the current business situation.
During a financial results call, Spring explained that the decision to close more stores is based on a “favorable business environment”. The manager assured that this acceleration in closures is positive for the financial health of Macy’s, since the company will be able to take advantage of real estate agreements that allow it to monetize closed properties.
Strategic decisions stand out
Macy’s CFO Adrian Mitchell He specified that the stores that will be closed belong to those centers with low performance.
“They are locations where the economic situation is not favorable, where customers have reduced their purchases and that are difficult to manage,” said Mitchell, highlighting that they are taking strategic decisions to concentrate efforts on more profitable branches.
The 65 stores that will close soon were already included in the Macy’s plan to reduce its total number to 350 by 2026. The company had previously announced its intention to close up to 150 stores in that period, and this measure is part of that process.
Although Macy’s has not revealed the exact list of stores that will close, Closures are expected to take place towards the end of January 2025, after the Christmas shopping season.
Online shopping boom
This announcement comes at a time when Macy’s, like other traditional retailersfaces the transformation ofs consumer habits driven by the rise of online shoppinga phenomenon that accelerated after the COVID-19 pandemic.
Digital sales have changed the dynamics of retail, leading Macy’s to adapt to new market demands.
Although Macy’s remains one of the largest chains in the United States, the closure of these stores reflects the increasing competition from online businesses and the need for companies to adjust to changes in consumer purchasing habits.
Thus, with this restructuring, the company seeks to improve its profitability and focus on the most profitable branches to guarantee its future in an increasingly digitalized environment.
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